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2019 (3) TMI 375 - AT - Income TaxSelf occupied house property - treatment of USA properties occupied by the daughter of assessee- deemed let out - deemed value of consideration for the purpose of computing income from house property - change of method of computation of income from self occupied house property - Held that - Considering the factual and the legal discussions appeal is restored to the file of assessing officer to treat the USA property as deemed let out and determine the ALV of the said property. Relied on SMT. ASHA BHOSLE 2011 (9) TMI 1179 - ITAT MUMBAI and Balmukund Acharya vs. DCIT reported in 2008 (12) TMI 88 - BOMBAY HIGH COURT Long term capital loss on sale of property - asset was hold for more than 36 months - period of holing - absolute legal right ownership - HELD THAT - In the light of expanded definition is contained in section 2(47) even when a sale, exchange, or relinquishment or extinguishment of any right, under a transaction the assessee is put in possession of an immovable property or retained the same in part performance of contract under section 53A of Transfer of Property Act, it amounts to transfer. No registered deed of sale is required to constitute a transfer. In CIT Vs K Ramakrishanan 2014 (3) TMI 812 - DELHI HIGH COURT held that in order to determine taxability of capital gain arising from the sale of property, it is the date of allotment of property which is relevant for the purpose of computing holding period and not the date of registration of conveyance deed. No illegality and infirmity in the order passed the ld Commissioner (Appeals), which we affirms.
Issues Involved:
1. Treatment of Property in Arlington, USA as Self-Occupied Property. 2. Period of Holding and Nature of Capital Gain on Property in Gurgaon. 3. Determination of Gross Annual Value of House Property in Mumbai. 4. Charging of Interest under Sections 234B and 234C of the Income Tax Act. Issue-wise Detailed Analysis: 1. Treatment of Property in Arlington, USA as Self-Occupied Property: The Revenue contended that the property in Arlington, USA, occupied by the assessee's daughter, should not be treated as self-occupied. The assessee had initially treated the Arlington property as self-occupied and the Mumbai property as deemed let out. The Commissioner (Appeals) held that since the Arlington property was occupied by the daughter, it could not be considered self-occupied. The Tribunal, referencing past judgments, concluded that the assessee should have the option to choose which property to treat as self-occupied based on what is more beneficial. The Tribunal restored the matter to the assessing officer to treat the USA property as deemed let out and determine its Annual Letting Value (ALV). 2. Period of Holding and Nature of Capital Gain on Property in Gurgaon: The Revenue argued that the period of holding for the Gurgaon property should be counted from the date of the buyer's agreement (07.11.2007) and not from the date of the confirmation letter (19.03.2007), thus treating the gain as short-term capital gain. The assessee contended that the right in the property was acquired on 19.03.2007, and the period of holding exceeded 36 months, qualifying it as a long-term capital gain. The Tribunal upheld the Commissioner (Appeals)'s decision, stating that the period of holding should be considered from the date the builder confirmed the transfer (19.03.2007), thus treating the gain as long-term. 3. Determination of Gross Annual Value of House Property in Mumbai: The assessee claimed the Mumbai property as self-occupied during the assessment proceedings and offered a minimal income based on the Municipal rateable value. The assessing officer, however, determined the ALV based on the purchase cost, resulting in a significantly higher taxable income. The Commissioner (Appeals) confirmed the action of the assessing officer. The Tribunal, referencing past judgments, directed that the USA property should be considered as deemed let out and the Mumbai property as self-occupied, thus allowing the assessee's appeal on this ground. 4. Charging of Interest under Sections 234B and 234C of the Income Tax Act: This issue was consequential to the primary issues discussed above. Since the Tribunal's decision on the primary issues would impact the computation of tax, the matter of charging interest under Sections 234B and 234C was not separately adjudicated. Conclusion: The Tribunal allowed the assessee's appeal partly, directing the assessing officer to treat the USA property as deemed let out and to determine the ALV accordingly. The Tribunal also upheld the Commissioner (Appeals)'s decision regarding the period of holding for the Gurgaon property, confirming it as a long-term capital gain. The Revenue's appeal was dismissed, and the assessee's appeal was allowed for statistical purposes.
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